Sustainability claims in the spotlight across Europe

On 28 January 2021, the Netherlands Consumer and Markets Authority (Autoriteit Consument & Markt – ACM) published its final “Guidelines on Sustainability Claims” (the Guidelines – available in English and Dutch).

Following public consultation of the draft Guidelines at the end of last year (see our earlier post here), the ACM has now finalised the Guidelines which set out five key “rules of thumb” for making sustainability claims. These rules of thumb are intended to prevent companies from making false or misleading claims to consumers about the environmental impact of their products or services, for example by greenwashing.

Five rules of thumb

The five rules of thumb set out in the Guidelines are as follows:

1. Make clear what sustainability benefit the product offers: sustainability claims are only useful to consumers if they are clearly phrased, easy to understand and do not contain any misleading information.
   
   
2. Substantiate sustainability claims with facts and keep them up to date: any sustainability claims should be sufficiently substantiated with data and by reference to credible sources. From the moment the claim is made, a company must be able to prove the claim or refer to verifiable sources.
   
   
3. Comparisons to other products, services or companies must be fair: any comparisons with other products, services or companies must be “fair” and not misleading. The claims must explicitly mention what the products or services are compared with.
   
   
4. Be honest and specific about sustainability efforts: making general claims about a company’s sustainability efforts may be misleading. Instead, for each product, the sustainability efforts need to be specified.
   
   
5. Visual claims cannot be confusing: using symbols, pictures, pictograms, labels and colours cannot be misleading or give false impressions about a company’s sustainability efforts. It is important that consumers are able to distinguish between information about the sustainability efforts of the company or of the product specifically.

A step too far?

The Guidelines provide a number of examples of (potentially) misleading claims. Some of these examples could be seen as going too far, although it will remain to be seen how the Guidelines will be interpreted and enforced in practice.

Some key examples:

• The claim “100% recycled materials” on a cardboard box containing printing paper is – according to the ACM – ambiguous because it is unclear whether the claim relates to the box itself or the printing paper. As a solution, the ACM states that the claims should be phrased as follows: “This box is made out of 100% recycled materials.”
  
  
• The claim “our coffee is sustainable” in combination with the image of a green coffee bean, can be misleading, as the term “sustainable” is broad and could refer to various sustainable benefits. According to the ACM, the claim is not misleading if the company further specifies why its coffee is sustainable, for instance: “our coffee was grown organically, and farmers produce in accordance with the standards set by the International Labor Organisation”.
  
  
• The claim “our deodorant is CFK free” is misleading when all deodorants must be CFK free. Instead, the claim should read: “just like other similar products, this product, too, does not contain any CFKs” or “is CFK free as required by law.”

Given that the focus is on avoiding claims which might mislead consumers, the Guidelines are relevant to manufacturers and distributors as well as retailers and “influencers” to the extent they are responsible for advertising and marketing materials or statements made on product packaging or company websites. Under consumer protection laws, these entities could also face enforcement action in relation to any such misleading statements which are not compliant with the Guidelines and the five rules of thumb.

What next?

In its press release, the ACM indicates that that it will now start actively enforcing against companies that make misleading claims in relation to sustainability claims. This follows certain previous investigations into products in the food, cosmetics, clothing and domestic appliances sectors where the ACM found that two out of three claims did not contain sufficient information to determine whether the claim was factually correct. In almost 50% of the cases, the ACM had serious doubts as to whether the claims were correct.

Increasing focus on sustainability claims across Europe

The Guidelines reflect an ever-increasing focus on the impact of businesses’ approaches to sustainability on consumers by authorities across Europe, with not just the ACM but also the UK Competition and Markets Authority (the CMA) leading the charge and closely cooperating where possible.  The CMA also intends to publish guidance for business (and consumers) on sustainability claims in the summer this year, and the ACM’s Guidelines may well serve as a helpful blueprint in this regard (see more here). 

Further, on the same day that the ACM published the Guidelines, the European Commission and several national consumer authorities released the results of their ‘sweep’ of websites for sustainability claims.  They found that 42% of the claims they examined across various business sectors including garments, cosmetics and household equipment were exaggerated, false or deceptive, and could therefore amount to an unfair commercial practice under the Unfair Commercial Practices Directive. More specifically, they found that:

• more than half of the claims did not provide sufficient information in order to assess whether the claim was accurate;
  
  
• 37% included vague and general statements (“conscious”, “eco-friendly”, “sustainable”) which gave an unsubstantiated impression that the product had no adverse environmental impact; and
  
  
• 59% did not make evidence available to support the claim.

The companies concerned will now be contacted by the relevant national authorities to rectify the issues identified by the sweep.

This sweep is another recent example of national authorities across Europe working together to tackle the issue of greenwashing, reflecting the priorities of the European Commission’s New Consumer Agenda adopted last autumn (see more here).  We should expect to see further activity in this space during 2021 and beyond.